Judge Upinder S. Kalra, Case 22STCV20077 2023-04-18 Tentative Ruling

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On June 20, 2022, Plaintiff Jennifer Hart (“Plaintiff”) filed a complaint against Defendants Jennifer Kramer and Robert Ackerman (“Defendants.”) The operative First Amended Complaint was filed on December 8, 2022. The FAC raises six causes of action: (1) Breach of Contract, (2) Promissory Estoppel, (3) Conversion, (4) Unjust Enrichment, (5) Quantum Meruit, and (6) Civil Conspiracy. Plaintiff alleges that the parties entered into a co-counsel agreement, which Defendants breached. This agreement indicated that each attorney would be provided 20% of the total fees, which totaled $1,120,000. However, Plaintiff alleges that Defendants had the entire fee award wired to Defendant Kramer’s IOLTA account and paid Plaintiff $75,000 instead of the agreed 20%.

On January 10, 2023, Defendant Jennifer Kramer filed a Demurrer without a Motion to Strike.

On January 11, 2023, Defendant Robert Ackerman filed a Demurrer without a Motion to Strike. As of March 9, 2023, Plaintiff has not filed an Opposition.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. …. The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn 147 Cal.App.4th at 747.)

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to Code of Civ. Proc. §430.41(a)(2) & (3). In the Declaration of Robert Ackerman, the parties sent text messages and eventually met and conferred telephonically on December 30, 2022. The parties were unable to resolve the issues. (Dec. Ackerman ¶ 2-4.)

The Court may take judicial notice of the existence of the records, but not the truth of matters asserted in such records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565). As a result, although the court may take judicial notice that the documents exists, the Court may not take judicial notice of the truth of the facts in the documents.

Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

1. The State Bar of California’s Attorney Profile of Jennifer Lee Hart, State Bar No 176171.[1]

4. Excerpt from “Documents Filed” re the Class Action relating to the relevant time period

Defendant demurs on the grounds that all the causes of action in the FAC fail to state sufficient facts to constitute a cause of action.

Defendant argues that when Plaintiff was suspended by the State Bar on October 31, 2015, Plaintiff’s legal right to participate in attorneys’ fees was invalidated. (RJN 1.) Because of this suspension, Defendant argues that there are several “independent grounds” under which Plaintiff’s right to attorney’s fees were extinguished. First, because fee agreements with non-lawyers are void pursuant to California Rules of Professional Conduct Rule 5.4, when Plaintiff was suspended, the agreement was invalidated in October 2015, and was not breached in June 2018. Second, Defendant argues that Plaintiff’s suspension was the equivalent of a withdrawal, and since there was no justifiable cause for the withdrawal, Plaintiff cannot claim compensation. (Demurrer 5: 25 – 6: 4, citing to the Rutter CA Practice Guide, Professional Responsibility, Chapter 5, section [5:1071] and [5:1086].)

Lastly, Defendant argues that once Plaintiff terminated the attorney-client relationship with Plaintiff, the fee agreement was terminated. Defendant cites to Olsen v. Harbison, where the Court of Appeal stated: “once Klawitter fired plaintiff as her attorney, the contract between them ceased to exist. When the Klawitter-plaintiff contract ceased to exist, the fee-sharing agreement between plaintiff and defendant, premised on that agreement, also ceased to exist. There was no viable contract on which to base a breach of contract claim against defendant, and the trial court therefore properly granted summary adjudication on this cause of action.” (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 341.) Here, Defendant argues that on December 8, 2015, Plaintiff was fired by the Client and therefore, the agreement was not viable and thus no breach of contract occurred in 2018.

Plaintiff[2] argues that this cause of action should be overruled because there is uncertainty about the fact of damage which “prevents the accrual of a cause of action.” Here, if Plaintiffs did not prevail, then there would have been no fee awarded and thus it was uncertain whether Plaintiff would suffer any damage until Plaintiff was not paid the Minimum Guarantee. (Opp. 7: 2-12.) Plaintiff argues that the equitable claims are affirmative defenses and are not the proper subject of a demurrer. Here, the issue is whether the statute of limitations has run, and such a demurrer “will not lie where the action may be, but is not necessarily, barred.” (Opp. 7: 22-23.)

The Court finds that the FAC fails. First, all the causes of action are barred by the respective statute of limitations. When Plaintiff was fired in December 2015, Plaintiff had four years from the alleged breach to file the current matter. Thus, as Defendant correctly argues, the latest this matter could have been brought is December 2019. Thus, as Defendant correctly argues, the latest this matter could have been brought is December 2019.

Second, once Plaintiff was ineligible and was fired by the Client, there was a material breach and the contract ended, as to both the co-counsel agreement and the agreement with the Client. As the court in Olsen stated, “once Klawitter fired plaintiff as her attorney, the contract between them ceased to exist. When the Klawitter-plaintiff contract ceased to exist, the fee-sharing agreement between plaintiff and defendant, premised on that agreement, also ceased to exist. There was no viable contract on which to base a breach of contract claim against defendant, and the trial court therefore properly granted summary adjudication on this cause of action.” (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 341.) Here, the firing of Plaintiff ended the co-counsel agreement, and thus is void.

Leave to amend should be liberally granted if there is a reasonable possibility an amendment could cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.) The Plaintiff has the burden of demonstrating that leave to amend should be granted, and that the defects can be cured by amendment. (“Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Here, it is unlikely that Plaintiff will be able to cure the statute of limitation defects. The facts, as alleged, indicate that Plaintiff entered into a co-counsel agreement, and was subsequently fired. Once that occurred, Plaintiff had four years to bring this suit. Even under the latest date, the statute of limitations bars all of Plaintiff’s claims.

Pursuant to CCP § 581d, this written order of dismissal constitutes a judgment and shall be effective for all purposes. The Clerk shall note this judgment in the register of actions in this case.

[1]The Court may take judicial notice of licenses issued by the state or its agencies in ruling on a Demurrer. (C.R. v. Tenet Healthcare (2009) 169 Cal.App.4th 1094, 1103.)

[2] Plaintiff submitted a consolidated Opposition, so the arguments on each of the motions are the same for Plaintiff.

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: April 18, 2023

CASE NAME: Jennifer Hart v. Jennifer Kramer, et al.

CASE NO.: 22STCV20077

DEMURRER WITHOUT MOTION TO STRIKE

MOVING PARTY: Defendant Jennifer Kramer

RESPONDING PARTY(S): Plaintiff Jennifer Hart

REQUESTED RELIEF:

1. An order sustaining the demurrer as to the entire complaint.

TENTATIVE RULING:

1. Demurrer is SUSTAINED, without leave to amend, as to the entire complaint.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On January 10, 2023, Defendant Jennifer Kramer filed a Demurrer without a Motion to Strike. As of March 9, 2023, Plaintiff has not filed an Opposition.

On January 11, 2023, Defendant Robert Ackerman filed a Demurrer without a Motion to Strike.

LEGAL STANDARD

Demurrer

Meet and Confer:

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to Code of Civ. Proc. §430.41(a)(2) & (3). In the Declaration of Rahul Sethi, it states that the parties sent email correspondence on December 28, 2022. On December 30, 2022, the parties met telephonically, but the parties were unable to resolve the issues. (Dec. Sethi ¶ 2-5.)

Request for Judicial Notice:

Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

Defendant Kramer requests the following document be judicially noticed:

1. The State Bar of California’s Attorney Profile of Jennifer Lee Hart, State Bar No 176171.

Pursuant to Evidence Code §452(c), the Court takes judicial notice of the official acts of the State Bar of California. In particular, the Court may take judicial notice of licenses issued by the state or its agencies in ruling on a Demurrer. (C.R. v. Tenet Healthcare (2009) 169 Cal.App.4th 1094, 1103.)

The Request for Judicial Notice is GRANTED.

ANALYSIS:

Defendant Kramer demurs on the grounds on various grounds.

Factual Background:

Plaintiff and Defendants entered a co-counsel agreement, which indicated that each attorney would receive 20% of the total fees awarded by the court. Plaintiff received a check for $75,000, despite the final attorney fee award totaling $1,200,000. However, on October 31, 2015, Plaintiff became ineligible to practice law. On December 8, 2015, Plaintiff was fired by the client. On December 11, 2015, Plaintiff regain active status.

Statute of Limitations:

Defendant argues that all the cause of action are barred by the statute of limitations.

A. Breach of Contract

Defendant argues that the breach of contract claim is barred by the statute of limitations. Under CCP § 337, the statute of limitations for a breach of written contract is 4 years. Because Plaintiff was fired, the breach of contract occurred on December 8, 2015. Thus, latest Plaintiff could bring a claim under the contract was December 8, 2019.

Plaintiff argues that this cause of action should be overruled because there is uncertainty about the fact of damage which “prevents the accrual of a cause of action.” Here, if Plaintiffs did not prevail, then there would have been no fee awarded and thus it was uncertain whether Plaintiff would suffer any damage until Plaintiff was not paid the Minimum Guarantee. (Opp. 7: 2-12.)

B. Promissory Estoppel

Defendant argues that this cause of action fails for two main reasons. One, an equitable claim such as promissory estoppel cannot lie where there is an express agreement. The claims fail because the parties entered a written contract. Two, under CCP § 337, the statute of limitations for a claim for promissory estoppel based on a written contract is four years. Same as the breach of contract, the breach occurred in December 2015, and therefore, this claim is barred.

C. Conversion

Defendant argues that this cause of action fails because it barred by the statute of limitations. Under CCP § 338(c), conversion has a three-year statute of limitation. Even based on the later date of June 2018, Plaintiff’s claim is still barred as Plaintiff had until June 14, 2021, to bring this matter.

D. Unjust Enrichment

Defendant argues that under either CCP § 338 or § 339, the statute of limitations bars this claim. Under CCP § 339, which applies when there is no contract, the statute of limitations for a claim for unjust enrichment when there is no written contract is two years. Under CCP § 338, the statute of limitations for an unjust enrichment claim based on conversion or fraud is three years.

E. Quantum Meruit

Defendant argues that this cause of action is barred by the applicable statute of limitations. A claim for quantum meruit has a two-year statute of limitation.

F. Civil Conspiracy

Defendant argues that the civil conspiracy cause of action is barred by the statute of limitations. A civil conspiracy claim has the same statute of limitation for the underlying tort, which would be conversion. As stated above, conversion has a three-year statute of limitations.

Plaintiff argues that these equitable claims are affirmative defenses and are not the proper subject of a demurrer. Here, the issue is whether the statute of limitations has run, and such a demurrer “will not lie where the action may be, but is not necessarily, barred.” (Opp. 7: 22-23.)

Ineligibility of Attorney:

Defendant next argues that on October 31, 2015, when Plaintiff was ineligible to practice law, Defendant was not allowed to “employ, associate in practice with, or assist a person the lawyer knows or should know is ineligible to perform…” (Rules of the State Bar of California, Rule 5.3.1.) Therefore, Defendants could no longer work with Plaintiff. Additionally, once Plaintiff became ineligible, the co-counsel agreement became void. Defendant cites to Aldrich v. San Fernando Valley Lumber Co., stating, “When an attorney is suspended from the practice of law, [her] authority to act as an attorney ceases, and [she] is no longer authorized to represent a party in litigation." (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 741 (citing Bus & Prof Code § 6117; Antonsen v. Pacific Container Co. (1981) 48 Cal.App.2d 535, 539; Lovato v. Sante Fe Int'l Corp. (1984) 151 Cal.App.3d 549, 553.).) Moreover, when Plaintiff was fired by the Client, the co-counsel agreement became void. (Demurrer 6: 22-23, citing to Olsen v. Harbison (2010) 191 Cal.App.4th 325, 339-342.)

Privileged Conduct:

Lastly, Defendant argues that under Civil Code § 47(b)[1], the litigation privilege prevents these claims. The claims raised by Plaintiff all relate to “acts performed during litigation by Defendants in furtherance of the Client’s interests, to wit: failing to provide Plaintiff with one-third of the workload, "conspiring" to have Plaintiff terminated, having court-approved settlement funds go to a particular IOLTA account, and allegedly failing to inform the court of the Co-Counsel Agreement.” (Demurrer 7: 20-23.)

The Court finds that the FAC fails for various reasons. First, all the causes of action are barred by the respective statute of limitations. When Plaintiff was fired in December 2015, Plaintiff had four years from the alleged breach to file the current matter. Thus, as Defendant correctly argues, the latest this matter could have been brought is December 2019.

Second, once Plaintiff was ineligible and was fired by the Client, there was a material breach and the contract ended. As the court in Olsen stated, “once Klawitter fired plaintiff as her attorney, the contract between them ceased to exist. When the Klawitter-plaintiff contract ceased to exist, the fee-sharing agreement between plaintiff and defendant, premised on that agreement, also ceased to exist. There was no viable contract on which to base a breach of contract claim against defendant, and the trial court therefore properly granted summary adjudication on this cause of action.” (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 341.) Here, the firing of Plaintiff ended the co-counsel agreement, and thus is void.

Demurrer is SUSTAINED, as to all cause of action.

Leave to Amend:

Leave to amend should be liberally granted if there is a reasonable possibility an amendment could cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.) The Plaintiff has the burden of demonstrating that leave to amend should be granted, and that the defects can be cured by amendment. (“Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Here, it is unlikely that Plaintiff will be able to cure the statute of limitation defects. The facts, as alleged, indicate that Plaintiff entered into a co-counsel agreement, and was subsequently fired. Once that occurred, Plaintiff had four years to bring this suit. Since other claims have the same or shorter statute of limitation, the statute of limitations necessarily bars all of Plaintiff’s claims.

Leave to Amend is DENIED.

CONCLUSION:

For the foregoing reasons, the Court decides the pending motion as follows:

Demurrer is SUSTAINED, without leave to amend, as to all causes of action.

Pursuant to CCP § 581d, this written order of dismissal constitutes a judgment and shall be effective for all purposes. The Clerk shall note this judgment in the register of actions in this case.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: March 14, 2023 __________________________________ Upinder S. Kalra

Judge of the Superior Court

[1] Civil Code § 47states that a privileged publication or broadcast is one made: “(b) In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure…”